If total revenue goes up when the price falls,demand is said to:
A)be price-inelastic.
B)be price unit-elastic.
C)be price-elastic.
D)have positive price elasticity.

Question

Quizplus · Accepted Answer

When total revenue goes up as the price falls, demand is said to be price-elastic. This means that a small change in price leads to a relatively larger change in quantity demanded, resulting in an increase in total revenue. If demand is price-inelastic, a decrease in price would lead to a relatively smaller increase in quantity demanded and may even result in a decrease in total revenue. If demand is price unit-elastic, a decrease in price leads to an equal percentage increase in quantity demanded, resulting in no change in total revenue. If demand has positive price elasticity, it simply means that a change in price leads to a change in quantity demanded, without specifying whether it is an increase or decrease in total revenue.

If Total Revenue Goes Up When the Price Falls,demand Is